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The J Shop Sees A Flying Start in Q2 2022

Posted on by Yiming Yan

by Yiming Yan

In its unaudited financial results for the second quarter of 2022, JD.com reported a record net service revenue of US$6.2 billion, up 21.9 percent year over year (YOY). The J Shop had experienced impressive growth in the second quarter, as part of JD’s upgrading of its Fashion and Lifestyle business.

Q2 coincided with two major promotions, the 520 Festival (Chinese Valentine’s Day) and the 618 Grand Promotion, during which The J Shop also saw a concentrated soaring sales after the upgrade.

In this year’s 618 Grand Promotion, the number of participating merchants in The J shop surged by more than 50 percent YoY, and there were up to twice as many products available. The sales of 9707 brands and 531 J-shop categories had 100 percent year-over-year growth during the 618 Grand Promotion, while the sales of its omni-channel business saw an 83 percent year-over-year growth.

In addition, The J shop also saw a flurry of international brands on board during the quarter, including CELINE, Maison Margiela, Maison Kitsuné, Moose Knuckles, etc., while almost 300 premium brands launched official flagship stores with The J Shop. The array of cosmetic brands in The J Shop has been enhanced by the opening of official flagship stores such as LA MER, ARMANI, Jo Malone London, Shiseido, M.A.C., and so on.

Faced with sporadic COVID shutdowns during the quarter, The J Shop has played to its strengths to help merchants overcome supply chain challenges and support the industry’s high-quality growth, by using digital technology to help merchants shorten production cycle time and ease inventory strain. In order to assist the brands in clearing out their inventory during the 618 Grand Promotion, The J Shop offered a sell-out rate of over 90 percent for clearance items from brands including HLA.

In May of this year, in order to further strengthen the omni-channel layout, JD Fashion and Lifestyle business was officially upgraded to The J Shop by launching a new online channel on the JD app and opening offline physical stores in Xi’an, Shenzhen, Chengdu, Beijing and other cities. The J Shop integrates JD’s digital intelligence supply chain advantages and omni-channel capabilities to improve user experiences. Online orders for store delivery can be made in as fast as one hour.

 

(yanyiming1@jd.com)

JD.com Named among 2022 FORTUNE China ESG Impact List

Posted on by Vivian Yang

by Vivian Yang and Xinyi Guan

JD.com has been named among FORTUNE China’s “2022 China ESG Impact List” released on August 23rd , together with 39 companies. This is the first time FORTUNE has taken ESG performance a metric to review companies in China, in hopes of honoring the vanguards and raising awareness of the ESG concept in China’s business community.

The list is conducted through a number of surveys, case studies, company interviews and also takes into account the finalists’ ESG information disclosure completeness and their comparative status in respective industries based on Retinitis’s data.

JD.com’s efforts in delivering essential supplies in the ongoing anti-COVID fights, its carbon reduction actions throughout the supply chain, and several governance practices are highlighted by FORTUNE China.

FORTUNE editor’s note:

JD.com’s “Green Stream Initiative” is exploring carbon reduction in every part of its supply chain ranging from packaging, warehousing, transportation, to product recycling and more. By the end of 2021, its “Green Stream Boxes” and other recyclable delivery packages have been accumulatively used 200 million times. Over the past five years, through close collaboration with partners from up and down-streams, the company enabled tens of thousands products to be delivered with original packages, saving the industry 10 billion disposable packages which equal to 20 million trees. JD Logistics is the first company of China’s logistics sector to join the Science Based Targets initiative (SBTi), committing to cut total carbon emissions by 50% from its 2019 level by 2030.

In March to May 2022, during Shanghai’s COVID-19 outbreak, JD summoned over 5,000 couriers and sorters from around the country and put in over RMB 2 billion yuan to ensure essential goods supply and support the livelihood of local people. On company governance, JD has included anti-corruption and other ESG-related targets into employees’ assessment, and in its board of directors, the percentage of independent directors has reached 66 percent.

While ranking the “biggest” companies on its the Global 500 list, FORTUNE also believes that it is equally important to identify those “respectable” companies who are pursuing heart-warming values beyond financial numbers, by improving the environment, protecting their employees and supporting communities. Their on-going practices are positively redefining the meaning of businesses.

Earlier this month, FORTUNE released the 2022 Global 500 list, in which JD.com moved up to the 46th position, continuing to stay top among Chinese companies of the industry six years in a row. The company is ranked 7th on FORTUNE China 500.

This May, JD.com released its “2021 Environment, Society and Governance Report”, including a dedicated chapter for the first time on climate change-related opportunities and risks that aligns with the Task Force on Climate-related Financial Disclosures (TCFD). The report shows that in the past year, JD advanced its carbon-reduction actions on all fronts from daily operations, supply chain management to sustainable consumption promotion and more. Meanwhile, JD has been supporting over 27,000 new, leading and specialized SMEs that are recognized at the provincial level. JD’s rural revitalization initiative, known as the “March to Rich Plan” has driven China’s rural areas to achieve an output value of RMB 320 billion yuan. On employment, by the end of 2021, the total number of JD employees including listed and non-listed companies exceeded 420,000, with 80 percent of its frontline staff coming from rural areas.

During the fight against COVID resurgences in China this spring, JD Logistics delivered more than 150,000 tons of essential goods to affected people, including staple food, medicines, infant and maternal products and more. Over 5,000 frontline workers were dispatched to Shanghai where they went up and beyond to ensure local people’s livelihoods, such as setting up more than 1,600 contact-free delivery stations in the neighborhoods. Incomplete statistics showed that the company has put in a total of RMB 2 billion yuan in supporting the fight against the pandemic in Shanghai, Beijing and other regions with outbreaks this year so far.

Positioned as a new type of real economy enterprise with both real economy DNA and attributes, and digital technologies and capabilities, JD.com attaches great importance to its social responsibilities since day one. On occasions of floods, pandemic outbreaks and other disaster alleviation events, the company can always be seen in the frontline and spare no effort to support the society. At the same time, the company continues to build and integrate its “Responsible Supply Chain” and its “Three Networks” of merchandises, warehouses and tech-driven services, which go beyond enhancing the stability and reliability of its own supply chain. By opening these infrastructure and technological capabilities, JD is also enabling more and more enterprises in its industrial ecosystem along the supply chain to accelerate their digital transformation and help them improve cost and efficiency, thus contributing to the smooth and high-quality growth of the real economy.

 

(vivian.yang@jd.com)

Posted in ESG

JD Logistics Interim 2022 Financial Results Show Strong Growth

Posted on by Yuchuan Wang

by Yuchuan Wang

JD Logistics released its interim 2022 earnings results on August 23, with revenue increasing by 20.9 percent to RMB58.6 billion yuan, a growth rate that is higher than the industry’s average.

External factors including the pandemic have posed challenges to the global logistics industry, while JD Logistics’ continuous investment in supply chain infrastructure and intelligent technology empowers the company to leverage flexible and resilient integrated supply chain solutions. In the second quarter of 2022, JD Logistics’ revenue from external customers increased by 27.7 percent YoY to RMB18.2 billion yuan, accounting for nearly 60 percent of total revenue for the quarter, thanks to the company’s tailored supply chain solutions and products for customers from various industries including FMCG, home appliance, apparel, 3C, automotive, fresh produce and more.

Jd Logistics Put Battery Swapping Vehilce in Use

At the same time, JD Logistics keeps expanding its logistics infrastructure at home and abroad. As of June 30, 2022, JD Logistics operated over 1,400 self-operated warehouses and over 1,700 owner-operator cloud warehouses under its Open Warehouse Platform, with an aggregated floor area (GFA) of approximately 26 million square meters. Same-day or next-day delivery service covered China’s 94 percent counties and 84 percent towns and villages.

In June, JD Logistics launched the first automated warehouse in the United States, “Los Angeles No.2”, enlarging its self-operated warehouses in the country reaching an area of approximately 1,000,000 square feet. Since 2020, JD Logistics has launched self-operated overseas warehouses in the United States, Germany, the Netherlands, France, the United Kingdom, Vietnam, the United Arab Emirates, Australia, Malaysia and so on, representing the company’s initial milestone achievements in its global network expansion plan. As of June 30, 2022, JD Logistics operated approximately 90 bonded warehouses, international direct mail warehouses and overseas warehouses, covering an aggregate GFA of approximately 900,000 square meters with an over 70 percent increase year-over-year.

JD Logistics has been investing in smart technologies regarding warehousing and delivery. JD Logistics had applied for over 7,000 patents and software licenses, among which more than 4,000 are related to automation technology and unmanned technology. As the first company in China to apply autonomous delivery vehicles commercially on public roads, JD Logistics now deploys over 400 such vehicles in more than 25 cities including Beijing, Tianjin, Changshu and more.

Additionally, JD Logistics is deeply aware that the future of the company is closely tied to the environment, society and the industry. In May, JD Logistics published its first ESG report; and in June, JD Logistics and partners jointly released the “Carbon Neutral Guide for Logistics Parks” and took the lead in presenting a comprehensive solution for carbon neutrality in logistics parks. JD Logistics also released the industry’s first Delivered with Original Package (“DWOP”) green packaging certification, and joined hands with many partners to set the new goal of green packaging, aiming at achieving more than 80 percent of e-commerce products support DWOP by 2030.

 

(yuchuan.wang@jd.com)

JD Executives: Confident in Macro Economy and Future Consumption

Posted on by Doris Liu

by Doris Liu

JD’s top executives believe that the retail industry has the power to weather different economic cycles, with confidence in the long-term trend of China’s macro economy as well as consumption, according to comments made by Lei Xu, CEO of JD.com, during a conference call to share the second quarter and interim result of 2022 released on August 23.

JD.com saw an increase of net revenues to RMB267.6 billion yuan (US$40.0 billion) in the second quarter, 5.4 percent up from the second quarter of 2021. Net service revenues went up 21.9 percent to RMB41.6 billion yuan (US$6.2 billion) year-over-year (YOY). Non-GAAP income from operations jumped from RMB2.5 billion yuan in the second quarter of 2021 to RMB5.8 billion yuan (US$0.9 billion).

Xu emphasized that as China’s consumer market is expected to become the world’s largest in scale, JD will always stick to focusing on user experience, supply chain capabilities, cost reduction and efficiency improvement, and investment in technology and innovation through a disciplined approach to capture growth opportunities with a long-term perspective.

Notably, driven by healthy user growth in the core retail business, a sequential net addition of over 10 million annual active users have joined JD.com compared with Q1; meanwhile the overall users showed a trend of higher shopping frequency, daily active user (DAU) and average revenue per user (ARPU). JD PLUS, the premium membership program of JD.com, set a record high in scale by surpassing 30 million members in July 2022. Moreover, the average annual spending of JD PLUS members reached eight times more than non-PLUS members by Q2, indicating the robust consumption power and stickiness of the members.

JD.com’s omni-channel remained a momentum driver, despite challenges brought by COVID-19 still existing in Q2. Intra-city retail business, seeing a triple-digit YOY GMV growth in Q2, will be regarded as a new model of business and services with design and integration of products, systems and categories, Xu said, sharing his views that only through a win-win-win for brand merchants, offline merchants and e-commerce companies in terms of profit can the new pattern be long-lasting and sustainable.

JD Logistics, demonstrating a strong practice to empower the industry in terms of supply chain capabilities, received external revenues accounting for nearly 60 percent of its total revenues in Q2. During Q2, JDL launched two new Asia No.1 smart industrial parks into operations in the cities of Yiwu and Wenzhou in Zhejiang province. In total, JDL operated over 1,400 warehouses as well as nearly 90 bonded, international direct mail and overseas warehouses as of Q2.

For the Group as a whole, the management has better control over and confidence in the bottom-line performance, said Sandy Xu, CFO of JD.com. “We will continue to gain market share in our core business and maintain our commitment to invest for the long term,” she added.

 

(liujun215@jd.com)

JD.com’s Omni-channel Business Gains Momentum

Posted on by Mengyang He

by Mengyang He

On August 23, JD.com released its unaudited financial results for the three and six month periods ending June 30, 2022, showing a continued build-up in its omni-channel business.

According to the results, JD Super, JD.com’s omni-channel supermarket, collaborated with more than 27,000 brands and over 34,000 brick-and-mortar stores through JD’s “one-hour delivery” service during the 618 Grand Promotion this year, and provided consumers with on-demand shopping options in nearly 400 cities across China.

Additionally, more than 30,000 partner stores saw increases in transaction volume of over 500 percent YOY. In particular, the omni-channel businesses of retail chains including Walmart, China Resources Vanguard (CR Vanguard), and Yonghui increased transaction volume by over 660 percent YOY.

JD,com to Launch New 40,000 Sq m Physical Store " JD MALL"
JD MALL in Xi’an

“Our omni-channel business maintained healthy momentum in Q2, and our intra-city retail business continued to deliver triple-digit year-on-year growth. JD is driving the retail industry’s optimization in cost, efficiency and user experience,” said Lei Xu, CEO of JD.com in the earnings conference call. “With our existing core capabilities, JD will further explore new business models, improve technologies, and expand in omni-channel.”

As of now, JD.com has opened a variety of physical stores with the omni-channel retail model, such as JD Mall, E-Space, JD Home Appliance Store, JD Pharmacy, SEVEN FRESH Supermarket, JD Convenience Store, JD Auto Service, and more, further enriching shopping experiences for its over 580 million customers.

 

(hemengyang5@jd.com)

JD PLUS Premium Membership Surpasses 30 Million

Posted on by Doris Liu

by Doris Liu

JD PLUS, a premium membership program offered by JD.com, saw a record high growth rate, with the number of members growing from 25 million at the end of 2021 to over 30 million by July this year, continuing to be among the largest paid membership programs in the industry.

As the first program of its kind in China’s e-commerce sector, JD PLUS joined hands with more than 1,200 well-known brands to create a full-scenario ecosystem covering both online and offline businesses, becoming an entry way to the good life for consumers, said Chen Lin, vice president of JD.com and head of platform business for JD Retail.

The rapid growth of JD PLUS indicates a positive win-win-win for consumers, brands and JD.com. The participation of more and more brands stimulates the offering of membership benefits, which further attracts more customers to take part, thus driving the high-quality growth of both JD.com and brand merchants, as well as creating value for the platform’s refined user operations.

1. Robust and Sustained Momentum for JD’s Growth

According to JD’s data, the JD PLUS program has demonstrated its members’ characteristics of high consumption, high activity and high loyalty. For instance, the consumption amount and frequency of the newly joined JD PLUS members rose more than 150 percent and 120 percent respectively in the first year of the membership. Meanwhile, such members were more inclined to try new products across more categories.

JD PLUS members lead high-end consumption, accounting for nearly 50 percent of the total new product sales during this year’s 618 Grand Promotion. On Samsung PLUS Member Day in March this year, the members also showed an obvious preference for high-end products and new launches, with the transaction amount reaching 50-90 percent in most of the single products priced above RMB 5,000 yuan.

Furthermore, the members are more willing to proactively participate in JD’s business with a higher level of activity in JD Health, JD Fresh and more. Lin believes that the membership program has become a sustained momentum for JD’s high-quality development.

2. One-stop Solution for Better Life

About 80 percent of JD PLUS members are family-oriented users, meaning that daily necessities are crucial for their shopping. So far, delivery vouchers offered by JD PLUS program have helped save nearly RMB 1.8 billion yuan in shipping costs; co-branded bank cards have saved RMB 1.18 billion yuan; and the 24-hour “exclusive customer service for PLUS members” has been provided for more than 30 million times. A JD PLUS member in Shanghai had saved RMB 300,000 yuan during this year’s 618 promotion.

The average number of online benefits available for JD PLUS members every day exceeds 130, which has become the largest number in terms of paid membership programs in the industry.

“Saving money is not the only purpose,” Lin said. “Our original intention is to let more people enjoy a high-quality life conveniently.” JD continues to expand new industries, new benefits and new cards through opening up benefits internally with the broader external ecosystem, so that JD PLUS members get exclusive benefits and services as well as full-scenario benefits.

3. Certain Growth for Partners amid Uncertainties

“Affected by the uncertain market environment, major brands are no longer simply pursuing traffic growth, but focusing more on the refined operation of users,” noted Chunhui Meng, general manager of JD PLUS. As the largest membership system with the highest stickiness in the industry, JD PLUS supports both JD’s high-quality development and growth with external partners, Meng said.

To date, 1,200 established brands including P&G, Dyson, Apple, McDonald’s and KFC, among others, have collaborated with JD PLUS to offer high-value services. Earlier this year, the system also opened to third-party merchants for the first time, so that the merchants can now access PLUS marketing tools with traffic support to select products based on the “PLUS Preference Index”, set special prices for PLUS members and accurately reach target consumers.

JD PLUS was first introduced in 2015, and officially came online in March 2016. From the perspective of brands and merchants, JD PLUS helps achieve higher return-on-investment results, and will leverage JD’s capabilities in digital intelligence and supply chain to explore more needs under different consumption scenarios, said Meng, who is confident that JD PLUS will continue to bring more value to partners and customers.

 

(liujun215@jd.com)

JD Welcomes Unprecedented Number of Brands and Products

Posted on by Yiming Yan

by Xinyi Guan

On August 22, the J Shop, which was upgraded from JD Fashion and Lifestyle business, led many fashion brands at home and abroad to open the 2022 new arrival of J Shop’s autumn selections, bringing consumers plenty of new seasonal products and goodies in all categories.

JD has seen double the growth in the entry of brands and new products since last year. In 2022 the J Shop has registered 20,000 new merchants, with the number of new products reaching an unprecedented number, which has contributed to the 2022 fall promotion featuring the most brands, the most complete categories and the richest new products, including many customized brands and categories.

During this promotion, JD Luxury included more than 300 official flagship stores of luxury brands with exciting new products and hot items, including LOEWE, GIVENCHY, MaxMara and TOD’S. In addition, the J Shop has also planned a series of activities, such as special cooperation with MCM to launch the “MCM Fashion Tasting Salon,” inviting JD’s VIP customers to experience brand introductions, coffee tasting, nail art and so on.

In addition, the J Shop has upgraded its quality certification standards, with some requirements being higher than industry standards. All products that meet the quality of the preferred standards will be marked with the “quality certification” label, so consumers can refer to the label for extra peace of mind. For example, under the background of upgrading the national standard for down jackets, the J Shop will upgrade and issue the “Down Clothing Quality Certification Standard” to standardize the internal quality and appearance quality of pile filling, fluffiness, anti-drill down and so on.

In the past year, with the help of JD’s supply chain basic capabilities and digital technology capabilities, the J Shop has continued to create stable growth for many merchants in an uncertain environment. With the opening of the fall promotion in 2022, the J Shop will bring even more brands and commodities, worry-free and efficient purchase services, and online and offline integration scenarios, bringing consumers a different fall clothing quality consumption experience while expanding a new incremental space for clothing brand merchants.

 

(guanxinyi3@jd.com)

JD.com Announces Second Quarter and Interim 2022 Results

Posted on by Yuchuan Wang

On August 23rd, JD.com released its unaudited financial results for the three and six months ended June 30, 2022. Below is an infographic with the key highlights. The full release can be found here.